Lesson 2 - Concepts Flashcards
Business model
a set of planned activities designed to result in a profit in a marketplace
business plan
a document that describes a firm’s business model
e-commerce business model
a business model that aims to use and leverage the unique qualities of the internet and the World Wide Web
value proposition
defines how a company’s product or service fulfills the needs of customers
revenue model
describes how the firm will earn revenue, produce profits and produce a superior return on invested capital
advertising revenue model
a company provides a forum for advertisements and received fees from advertisers
subscription revenue model
a company offers its users content or services and charges a subscription fee for access ro some or all of its offerings
freemium strategy
companies give away a certain level of product or services for free, but then charge a subscription fee for premium levels of the product or service.
Transaction fee revenue model
a company receives a fee for enabling or executing a transaction
sales revenue model
a company derives revenue by selling goods, information or services
affiliate revenue model
a company steers business to an affiliate and received a referral fee or percentage of the revenue from any resulting sales
market opportunity
refers to the company’s intended marketspace and the overall potential financial opportunities available to the firm in that marketspace
marketspace
the area of actual or potential commercial value in which a company intends to operate
competitive environment
refers to the other companies operating in the same marketspace selling similar products
competitive advantage
achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, or its competitors.
asymmetry
exists whenever one participant in a market has more resources than other participants.
first mover advantage
a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service
complementary resources
resources and assets not directly involved in the production of the product but required for success, such as marketing, maagement, financial assets and repurtation
unfair competitive advantage
occurs when one firm develops an advantage based on a factor that other firms cannot purchase
perfect market
a market in which there are no competitive advantages or asymmetries because all firms have equal access to all the factors of production
leverage
when a company uses its competitive advantages to achieve more advantage in surrounding markets
market strategy
the plan you put together that details exactly how you intend to enter a new market and attract new customers
organizational development
plan that describes how the company will organize the work that needs to be accomplished
management team
employees of the company responsible for making the business model work
seed capital
typically, an entrepreneur’s personal funds derived from savings, credit cards advances, home equity loans, or from family and friends.
elevator pitch
short two-to-three minute presentation aimed at convincing investors to invest
incubators
typically provide a small amount of funding and also an array of services to start-up companies
angel investors
typically wealthy individuals or a group of individuals who invest their own money in exchange for an equity share in the stock of a business; often are the first outside investors in a start-up
venture capital investors
typically invest funds they manage for other investors; usually later-stage investors
crowdfunding
involves using the internet to enable individuals to collectively contribute money to support a project
e-tailer
online retail store
Community provider
creates an online environment where people with similar interests can transact ( buy and sell goods); share interests, photos, and videos; communicate with like-minded people; and receive interest-related information
content provider
distributes information content, such a digital news, music, photos video, and artwork
portal
offer users powerful search tools as well as an integrated package of content and services all in one place
transaction broker
processes transactions for consumers that are normally handles in person, by phone or by mail.
market creator
builds a digital environment where buyers and sellers can meet, display products, and establish a price for products
service provider
offers services online
e-distributor
a company that supplies products and services directly to individuals businesses
e-procurement
creates and sells access to digital markets
B2B services provider
sells business services to other firms
scale economies
efficiencies that arise from increasing the size of a business
exchange
an independent digital marketplace where suppliers and commercial purchasers can conduct transactions
industry consortia
industry-owned vertical marketplaces that serve specific industries
private industrial network
digital network designed to coordinate the flow of communications among firms engaged in business together.
industry structure
refers to the nature of the players in an industry and their relative bargaining power
industry structural analysis
an effort to understand and describe the nature of the competition in an industry, the nature of substitute products , the barriers to entry and the relative strength of consumers and suppliers.
value chain
the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services
firm value chain
the set of activities a firm engages in to create final products from raw inputs
value web
networked business ecosystem that coordinates the value chains of several firms
business strategy
a set of plans for achieving superior long-term returns on the capital invested in a business firm
profit
the difference between the price a firm is able to charge for its products and the cost of producing and distributing goods
differentiation
refers to al the ways producers can make their products or services unique and different to distinguish from those of competitors
commoditization
a situation where there are no differences among products or services and the only basis of choosing is price
strategy cost of competition
offering products and services at a lower cost than competitors
scope strategy
competing in all markets around the globe, rather than local, regional or national markets
focus/market niche strategy
competing within a narrow market or product segment
customer intimacy
focuses on developing strong ties with customers in order to increase switching costs
disruptive technologies
technologies that underpin a business model disruption
digital disruption
a business model disruption that is driven by changes in information technology
sustaining technologies
technologies that enable the incremental improvement of products and services
disruptors
the entrepreneurs and their business firms that lead a business model disruption
